Naturex snaps up second Italian botanical company

French botanicals supplier Naturex is acquiring Italian player HP Botanicals - building on the strong base it has been establishing in the European market in parallel to its American interests.

Avignon-based Naturex began its recent programme of acquisitions in July 2005, when it bought US-based Pure World for $37m (c €30m). After integrating that business it launched the next step in its global plan in January, this time with a focus on Europe, when it bought Hammer Pharma for €10m. Like Hammer, HP Botanicals is based in the northern Italian city of Milan, a key industrial zone for Europe with good strategic positioning for the Italian and German markets. By bringing both companies into the fold, Naturex is in an even stronger position to build strong links with its Italian clients - and reach out strategically to the rest of Europe.

The value of the HP Botanicals acquisition is €2.2m. In fact, a strong relationship between Hammer Pharma and HP Botanicals already exists; Naturex marketing manager Antoine Dauby told NutraIngredients.com that around half of HP's €2.8m income in 2006 was from sales of Hammer Pharma botanicals.

Moreover, the new owner has drawn particular attention to the two companies' complementary strengths - Naturex's international outlook versus HP's Italian focus, and synergies in formulation know-how. Elsewhere in Europe, Naturex strengthened its presence in the UK with the opening of a new commercial office in Oxford, a plan seen as instrumental to the company's aim of doubling its UK turnover over the next three years.

Naturex UK will enable Naturex to be closer to its current British and Irish clients, and Oxford was chosen as the location because it is centrally situated, Dauby told NutraIngredients.com. The French plant extract supplier sees the sales objective as addressing the increasing demand from food makers for natural extracts as an alternative to synthetic ingredients.

But the Hammer Pharma acquisition also helped build its advantage in pharmaceuticals, since Hammer has authorisation from the Italian Ministry of Health to produce ingredients for use in pharmaceutical products. On a European scale, Hammer compiled European Drug Master Files (EDMFs) for its main plant extracts, such as valerian, St John's wort and horse chestnut, which authorise their use in finished pharmaceutical products. Naturex CEO Jacques Dikansky told NutraIngredients.com that Naturex has worked on EDMFs for its own extracts, but since none of its facilities have had pharmaceutical approval Hammer's expertise in this area will prove a big asset.

Naturex reported sales of €66.2m in 2006, up 31.9 per cent on 2005, and a 4.3 per cent increase in operating profit to €6.8m. Sixty-one per cent Naturex's sales last year originated from North American, and 25.9 per cent from Europe (excluding France, which accounted for 7.4 per cent).

No firm figures has been put on the European plant extracts market, but it is well known that Italy and Germany figure large. Dikansky's estimate puts them at between 10 and 20 per cent overall.

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